Takeaway: In determining whether a party is a real party-in-interest to a proceeding, the Board focuses on the relationship between the party and the proceeding (e.g., the degree to which the party exercised, or could have exercised, control over the proceedings), not the relationship between the potential real party-in-interest and the patent owner.

In its Decision, the Board determined that the Petitions did not identify all real parties in interest, and that Petitioner had not established good cause for late correction of the Petitions or that such correction would be in the interests of justice). The Board, therefore, denied the Petitions.

Pursuant to 35 U.S.C. § 312(a)(2), the Board may consider a petition for inter partesreview “only if . . . the petition identifies all real parties in interest.” In this proceeding, the Board permitted Petitioner to file a Reply to Patent Owner’s Preliminary Response to address issues relating to real parties in interest and thereafter ordered supplemental cross-briefing by the parties on two issues. The Board began its Decision with a review of the factual background concerning Petitioner and its corporate family. Petitioner is a wholly owned subsidiary of another company, which in turn is owned by a third company. Several individuals are employees and/or corporate officers of Petitioner and either its parent or grandparent company, while other individuals have roles in all three companies. The three companies also share in-house legal counsel. According to Petitioner, preparation of the Petitions was managed by outside counsel, with the assistance of in-house counsel for Petitioner’s parent company, and was funded by Petitioner’s parent company. The Petitions initially were drafted with the parent company as Petitioner and sole real party-in-interest (RPI), but Petitioner was substituted for its parent company after the parent company was dismissed from the co-pending District Court patent infringement action. The Powers of Attorney filed in these proceedings were signed by the president of Petitioner, but mis-identify the Petitioner as the parent company. Petitioner represented to the Board that this was a clerical error that arose when Petitioner was substituted for its parent company before the Petitions were filed.

The Board analyzed whether the Petitions identified all RPIs.  It began with a summary of the applicable statutory and regulatory provisions:

     “The America Invents Act (“AIA”) is unequivocal: a petition for inter partes review “may be considered only if” it identifies all RPIs. 35 U.S.C. § 312(a)(2) (emphasis added). This identification must be made as part of a petitioner’s mandatory notices, required to be filed as a part of the petition. 37 C.F.R. § 42.8(a)(1). The only provision made in our Rules for subsequently updating the identification of RPI is “within 21 days of a change in the information,” i.e., a change in the status of a party as RPI. 37 C.F.R. § 42.8(a)(3). Otherwise, we have held that correcting the identification of RPI listed in a petition results in a loss of the petition’s filing date, with a new filing date assigned as of the date the RPI identification is corrected.”

The Board further explained that “[t]he determination of whether a party is an RPI is a ‘highly fact-dependent question,’ in which the focus is on the party’s relationship to theinter partes review pending before the Board, and the degree of control the party can exert over the proceeding.” The Board then reviewed several prior decisions concerning RPIs , noting that in each case, “central to the Board’s determination [that a third-party was an RPI] was that a party other than the named petitioner was controlling, or capable of controlling, the proceeding before the Board.” Next, the Board concluded that Petitioner’s parent company is an RPI to the proceedings and should have been identified as such in the Petitions. While the Board considered the “totality of the facts” before it, the following facts stood out to the Board: “the payment of legal fees and provision of legal support for preparation of the instant Petitions by [the parent company to Petitioner]; and the blurring of the lines of corporate separation between the companies.”

The Board was not persuaded by Petitioner’s argument that its parent company was not a real party-in-interest because it had been dismissed from the District Court litigation. The Board explained that “RPI is the relationship between a party and a proceeding; RPI does not describe the relationship between parties” and that “[t]he proper RPI analysis, therefore, focuses on the relationship of [the parent company] to these proceedings, and the degree to which [the parent company] exercised, or could have exercised, control over the Petition.” The Board then considered whether Petitioner could correct its RPI identification without losing its filing date. Petitioner argued that the Board should waive the regulatory requirement to name all RPIs to receive a filing date because “its error was in good faith and, therefore, good cause exists to permit correction of the RPI identification without altering the filing date of the Petitions.” Patent Owner “dispute[d] that the requirement of RPI identification is waivable.” The Board concluded that it did not need to resolve this dispute because Petitioner had not established that good cause to excuse a late identification existed in this case. In finding that Petitioner had not established good cause, the Board concluded that:

(a) Petitioner’s incorrect determination of RPI resulted from its misunderstanding of the law, not a mistake of fact;

(b) contrary to Petitioner’s argument, the PTAB’s decisions and Trial Practice Guide do not provide “little guidance” concerning RPI and privity and that, even if they had, several decisions concerning RPI issued while Petitioner “still had the opportunity to correct its Petition without encountering a 35 U.S.C. § 315(b) statutory bar”; and

(c) Petitioner’s “incorrect determination was not objectively reasonable, and cannot support good cause justifying late action” because “the facts overwhelmingly lead to the determination that [the parent company] is an RPI that should have been named in the Petitions” In summary, the Board determined that “even if the AIA and [its] Rules permit a petitioner to correct its identification of RPIs without affecting the petition’s filing date, [it] would not permit such correction here” and that Petitioner had not “provided a sufficient showing of good cause or otherwise convinced [the Board] that it would be in the interests of justice to allow correction of the RPIs identified in its Petition without loss of the original filing date.” In addition, correction of the RPI identification with a change in filing date would be futile because the Petitions would be barred; therefore, the Board was unable to consider the Petitions. Accordingly, the Petitions were denied.

Reflectix, Inc. v. Promethean Insulation Technology LLC, IPR2015-0039, 42, 44, 45, 47
Paper 18: Decision Denying Institution of Inter Partes Review
Dated: April 24, 2015
Patents: 7,935,410 B2; 7,935,411 B2; 8,327,601 B2; 8,343,614 B2; and 8,221,871 B2
Before: Linda M. Gaudette, Christopher L. Crumbley, and Kristina M. Kalan
Written by: Crumbley
Related Proceedings: Promethean Insulation Tech. LLC v. Sealed Air Corp., Civil Action No. 2:13-cv-01113